Government of Bihar Department of Industries Resolution Subject: Bihar Industrial Investment Promotion Policy, 2016 for promoting industrial development in the State The Government of Bihar is committed for the inclusive economic development of the State. Though the state is primarily an agrarian state but contribution of secondary sector i.e. industries, in inclusive economic development of the state is of equal importance and therefore can‘t be ignored. The State Government has taken a series of measures to further improve the investment climate in the state and envisages achieving the industrial development growth rate of 15% per annum. This means, increase contribution of secondary sector in the GSDP to more than 25% in line with the National Manufacturing Policy and ―Make in India‖ initiative. To achieve this goal the State Government has formulated the Industrial Investment Promotion Policy, 2016. The main strategy for achieving the goals of this policy is to focus on development of support infrastructure, prioritizing core sectors of future development with emphasis on advanced technology, skill development, a modified structured package of assistance and balanced regional development i.e. uniformly extending the benefits of investment to all geographical areas of the State. This policy also focuses on uplifting the socially marginalised groups & women entrepreneurs by offering specialized package of assistance to them. The policy has well-defined provisions for effective implementation, monitoring & grievance redressal for the entrepreneurs. Thus the Industrial Investment Promotion Policy, 2016 has an integrated approach towards industrial development in the state and offers a wide range of benefits to the investors coming to Bihar. 1. Introduction Bihar is one of the fastest growing states in India. During the period 2005-06 to 2014-15, the GSDP of Bihar at constant prices grew annually at 10.5 percent, which is one of the highest among all major Indian states. The scale and pace of economic change that Bihar has witnessed over the past few years has been the result of a comprehensive, home-grown reform program initiated by the government. These reforms ranged from changes in managing public finance and reforming government expenditures, public investments in building infrastructure, and most importantly revamping the law and order machinery. All these changes have provided an enabling environment for private investment in the state and greater industry commitment. Bihar has a unique location specific advantage because of its proximity to the vast markets of eastern and northern India, access to ports such as Kolkata and Haldia and to raw material sources and mineral reserves from the neighbouring states. Bihar is primarily an agrarian state and is one of the largest producers of vegetables and fruits in India. Bihar is endowed with water resources – both ground and surface water– as it receives an average rainfall of 1009 mm each year. Ganga is the main river that flows through the state, joined by tributaries that originate in the Himalayas. Some of the other major rivers are Saryu, Gandak, Budhi Gandak, Bagmati, Kamla and Mahananda. The state has a large base of cost effective, industrial labour, making it an ideal destination for a wide range of industries. Food processing, dairy, manufacturing, healthcare are some of the fastest growing industries in the state. The State has planned initiatives for the development of other sectors such as agricultural implements and small machine manufacturing, tourism, information technology, renewable energy etc. Bihar is aggressively working on developing supporting infrastructure in the state. In the absence of adequate roads no state can amplify its economic growth. With this background, the State Government has resolved to connect the capital city of Patna to the remotest areas in the state, so that people can reach the capital within a maximum of six hours from any place. In recent years, the State Government has been making endeavours to achieve this goal and, as a result, the network of roads and bridges has expanded at a rapid pace. The State 1 Government has also adopted the Bihar Road Resource Protection Policy, 2013 to ensure better maintenance of the growing road network. The total length of the State Highways (SH) is 4253 km (in 2015) and approximately 65% of these highways are double-lane roads. The National Highways, on the other hand, have a strategic significance in the state's economic development as they connect Bihar with other states. The total length of National Highways in the state is 4595 km (as of 2015) and efforts are being made to further increase the network at a rapid pace. Golden Quadrilateral Highway that passes through Bihar is in close proximity to some of the districts, viz. Kaimur, Sasaram, Aurangabad Gaya & Patna. These districts are well connected to this highway via branch roads. This serves as a high logistical advantage in catering to the markets within as well as in the adjoining states of Uttar Pradesh, West Bengal, Orissa, and Jharkhand. It provides connectivity to major industrial, agricultural, and cultural centres of India. The length of Golden Quadrilateral Highway that passes through the State, i.e. 204 km, has been widened. Eastern Dedicated Freight Corridor passes through the state and would connect Bihar with West Bengal, Jharkhand, Uttar Pradesh, Haryana and Punjab and is expected to be immensely beneficial for industries in the state. It would facilitate the transport of finished products to ports in Bay of Bengal in lesser time; thereby, bringing down the transportation cost, significantly. State Government has embarked on an ambitious plan to add substantial electricity generating capacity in the next few years. It is targeting to achieve a total generating capacity of 1330 MW by 2016-17, 3310 MW by 2017- 18 and 7270 MW by 2021-22. In order to turn its vision into reality, Bihar State Power Generation Corporation Limited (BSPGCL) has entered into joint ventures with reputed companies in the power sector, like National Thermal Power Corporation (NTPC) and National Hydro Power Corporation (NHPC). Some of the major power sector projects, at different stages of commissioning, are Nabinagar Stage-1 Plant, power projects in Buxar, Bhagalpur, Lakhisarai and Banka. On completion of all these projects, Bihar‘s dependence on the centre for its power requirements will reduce significantly and the state would become self-sufficient in meeting its power requirements. For the industrialization of the state, availability of land is an important factor. Consequently, land acquisition assumes greater significance and it necessitated the establishment of a land bank for which a corpus fund with a limit of INR 1500 crore was mooted. Later, this limit was raised to INR 2500 crore to meet the increasing demand of land by industries and other allied sectors. The State Government, in the last few years, have sanctioned a sum of INR 1650+ crore to Bihar Industrial Area Development Authority (BIADA), for land acquisition to ensure rapid creation of the land bank and industrial areas. There has been large scale change in industrial environment due to economic liberalization, privatization and globalization. Strong emphasis is being placed on Micro, Small and Medium Enterprises (MSME). Cluster based development is being promoted by the State Government and it is in the process of setting up specialized clusters for development of leather, small machinery, plastics, garments, jute & textiles, and food processing to boost the manufacturing sector and well-being of MSME entrepreneurs. Bihar is progressively adopting practices to create an investor friendly environment in the state, so as to facilitate investments. Some of the key reform measures taken are implementation of UDYOG SAMWAD portal for grievance redressal; effective implementation of single window system, development of an online inspection system; provision for submission of single integrated return under various labour laws; differentiated compliance inspection requirement based on risk profile of industries; provision of synchronized/joint inspection under various labour laws etc. The present policy aims at creating industry-friendly environment for maximizing investment, especially, in priority sectors i.e. food processing; tourism; , small machine manufacturing; IT, ITeS, electrical and electronic hardware manufacturing; textile; plastic and rubber; renewable energy; leather and technical education sector. The overall objective is to maximize the value addition to state's natural resources by setting up industries across the state, generating revenue and creating employment. This policy has been drafted in consultation with representatives of industries; industry association, investors, subject matter experts, etc. and efforts have been made to accommodate their views. It is expected that implementation of the policy will facilitate industrialization of the state, generate employment and add to its overall growth. 2 2. Our Vision, Mission and Strategy 2.1. Our Vision To establish Bihar as the most preferred investment destination by leveraging the state‘s comparative advantages and maximizing employment opportunities for attaining a balanced regional and sustainable development. 2.2. Our Mission Achieve industrial development growth rate of 15% per annum Increase contribution of the secondary sector to the GSDP to more than 25% in line with the National Manufacturing Policy